In the first half of January, PPD spun off subsidiary X-Chem, whose general partner, X-Co Holdings, raised more than $71 million for the company through a Form D exempt offering of securities.

The Form D was filed with the Securities and Exchange Commission Jan. 12.

“PPD has completed the spin-off of X-Chem, a leader in DNA-encoded library technology, to the shareholders of PPD’s parent company, forming an independent, privately owned biotech company,” PPD spokesman Randy Buckwalter said in an email Tuesday afternoon. “PPD initially invested in X-Chem in 2010 before acquiring the company in 2014.”

Waltham, Massachusetts-based X-Chem announced the transaction in a news release Jan. 6.

The biotechnology company may be independent of PPD, but X-Co Holding's listed directors have close ties with PPD. The limited partnership's executive officer is B. Judd Hartman, PPD’s general counsel. The directors named in the Form D filing are Ram Jagannoth and Joe Bress, who are with The Carlyle Group, and Stephen Ensley who is a PPD specialist within Hellman Friedman. The Carlyle Group and Hellman Friedman are the private equity firms that purchased PPD in 2011.

Hartman also serves on X-Chem's board, as do PPD officials Lee Babiss and Christine Dingivan. 

The PPD-X-Chem alliance appears to have spurred success. During its period of ownership by PPD, the biotechnology firm partnered with nine “major pharmaceutical and biotech organizations” that include Bayer, Pfizer and Roche and established collaborations on more than 70 therapeutic programs, according to the release. It has also licensed 16 programs to its partners for further development.

“Following the acquisition of X-Chem by PPD, PPD management provided strategic and financial guidance to help X-Chem advance the commercialization of its unique small molecule discovery platform and build out its biotechnology business model for future growth,” the release stated. “Based on the new strategic direction for X-Chem, the companies decided to spin out X-Chem to further pursue its biotech focus and partnering strategies to create maximal value for its shareholders."